Crypto Advocates Call For 'Friendly' Regulation

A Bahamian cryptocurrency advocate yesterday called for a friendly regulatory regime that would encourage Bahamian entrepreneurs to bring technology-driven solutions to market.

Wayne Johnson, a corporate manager for the Zucaz Group, told Tribune Business: "The digital economy is here to stay. The legislators have to be thorough with their legislation, but they must do it in a way that creates enthusiasm for entrepreneurs to be able to create solutions in this marketplace.

"You shouldn't bring legislation to block people from the marketplace, but bring solutions to encourage people to start new businesses and bring new wealth into the economy."

During a cryptocurrency and blockchain conference back in June, Sterling Global's technology head Brandon Caruana urged The Bahamas to adopt cryptocurrency legislation as a key element in plans to establish the nation as a "technology hub".

Mr Johnson's comments came after the Central Bank of The Bahamas, responding to a rash of companies promoting initial coin offerings (ICOs) and crypto/blockchain solutions, moved to warn Bahamians of the risk involved in investing in an unregulated, still-evolving industry.

"The Central Bank of The Bahamas wishes to advise the public that no licence has been granted to crypto currency operators by the Bank or any other financial regulator to offer digital currency, or to provide such services such as cryptocurrency exchanges, crypto loans or crypto and fiat processing in or from within The Bahamas," the regulator warned.

"Persons investing in such products and services do so at their own risk." The Central Bank added that crypto/digital currencies were not legal tender in The Bahamas, are not issued or backed by it, and are not legal foreign currency either.

"The Central Bank does not regulate or supervise virtual currencies, nor has the Bank authorised any entity to operate a virtual currency platform," the Central Bank reiterated. "The public is further advised to seek professional advice with respect to matters regarding savings and investments from legitimate and licensed financial institutions."

Mr Johnson yesterday said this warning was likely sparked by what the Central Bank saw as some proposals crossing the line into its regulatory territory.

"Any time you are offering what they consider a financial instrument; where if you are offering ATM services, and activities that come under the Central Bank's authority, the regulator is going to raise the alarm," he added.

In no way shape or form should coin offerings fall under the purview of the Central Bank. Too large an organization, too bureaucratic, ICOs will be stuck in red tape forever. Securities Commission, a smaller organization with an Executive Director that knows what she is doing, is the better regulator. Oh, and I disagree, no 'light touch' regulation for ICOs. Too risky, retail investors will be swindled, too many people pretending they know about crypto/block chain...light regulation would be a disaster.